10 Permits and Licenses Needed To Open A Small Business

There is nothing quite like the thrill of running your own business. Small emerging businesses allow for creative products and services and, dare we say, fun. You can come up with ground-breaking ideas, experiment with new ways of doing things, and hopefully make a ton of money while you’re at it. Most small companies are indeed thriving, some 65.3% are profitable, and 9% making over $1 million in revenue per year.

However, when you sit down to plot your business, it becomes clear very quickly that there are many details to take care of when opening and running a successful small business. Developing a memorable brand, launching a website, and hiring the right people are just a few.

Perhaps the least thrilling tasks to tackle are licenses and permits. Unless you’re the type to nerd out on rules and regulations — no judgment here — applying for the various business licenses essential to your success would probably come in dead last if this were a popularity contest.

You might be shocked to learn most states (all but nine) don’t require companies to have general business licenses to operate. But you’re not off the hook: your city, county, and industry will all have unique applications and requirements. And there are many other licenses beyond that. It’s a lot to navigate when you already have so many balls in the air.

That’s what we’re here for. We’ve identified the ten general licenses and permits that most small business owners should be familiar with, and we’ve mapped out a timeline for you to complete them.

What Do You Need to Start a Small Business?

1. General Business License

This license or permit is required by a government entity to conduct business. It seems simple enough, but the process can get complicated thanks to the muddling of local, state, and federal jurisdictions, and there is no one-stop-shop online where you can do your research. The ultimate reason for a business license is to ensure your small business is safe for the public. That’s why certain “riskier” businesses have stricter requirements. For instance, a street vendor might not need a license to sell baseball caps, whereas any food establishment, which inherently has the chance of food poisoning, certainly will.

How to Get a General Business License?

Check out your local city or county’s zoning office to find the business license application. If you Google “Your State + Business License Application,” you should be able to find it along with any requirements. You can also call your mayor’s office, county administrator, or Secretary of State.

How Much Does a General Business License Cost?

The cost varies depending on the region and your business type. That said, most business licenses cost $25 to $400 depending on the type of business, and there is often a registration fee of $50. Keep in mind you’ll probably have to renew your business license at least once a year.

2. Employer Identification Number (EIN)

Think of the EIN as the Social Security Number for your small business. It will be used for tax purposes; all businesses need one, except for sole proprietors with no employees. This should be one of the very first licenses you secure since you will likely need this on applications for business licenses and other permits.

How do I get an EIN?

You can get your EIN through the IRS online, but they only issue one per day. The application portal is open Monday through Friday, 7 a.m. to 10 p.m. EST, so you should jump on this first thing in the morning.

How much does an EIN cost?

Obtaining an EIN is free!

3. Certificate of Occupancy

A certificate of occupancy is a legal document that proves a structure, such as an office building or storefront, is safe to inhabit. It serves as proof that your business property is up to code and that the location is being used as intended. Without a CO, your small business cannot legally operate.

How do I get a Certificate of Occupancy?

Contact your local building or zoning inspection office and ask what documentation you'll need to provide to secure your CO. The information will most likely be posted on your local government's website. 

How much does a Certificate of Occupancy cost?

The cost varies from jurisdiction to jurisdiction, but they typically run around $100 plus an additional fee for every square foot in the building.

4. “DBA” or “Doing Business As” Permit

This also goes by a mysterious name: The Fictitious Business Name Permit. Any business that uses a business name different from the owner’s legal name may need this. When you form a business, its legal name automatically defaults to the name of the person who owns it unless you launch it as an LLC.

How Do I Get a DBA Permit?

Just like the general business permit, DBA requirements vary by jurisdiction. You’ll either go to your county clerk’s office to file your paperwork, or you’ll do so with your state government.

How Much Does a DBA Cost?

You can expect filing fees in the range of $10 to $100, and some states may ask you to place a fictitious name ad in a local newspaper for a set amount of time to fulfill a public notice requirement.

5. Food Service Licenses

If your small business sells food, you’ll have a lot more on your plate, to so speak. You’ll typically need a food seller’s license and a food handler’s permit at a minimum.

The city or county health departments issue food service licenses and require in-person visits to ensure compliance with regulations. The health inspector will continue to visit your restaurant up to three times a year to ensure compliance with high standards. The FDA and USDA also require a variety of permits.

How to Get Food Licenses

You can start by researching the food vendor requirements for your state with the U.S. Food and Drug Administration. When applying for a food service license, you'll need the name of your restaurant, an address for a permanent kitchen facility (even for food trucks), and the owner's personal information. Your food service license may expire automatically in certain locations, so read the fine print and renew your license.

A food handlers permit can be easily obtained online through ServSafe, Learn2Serve, and StateFoodSafety, which provide training and exams. Most food handler cards are good for at least two to three years.

How Much Do Food Licenses Cost?

The fee for a food service license, which can vary by location and number of employees, ranges from $100 to $1000. Food handlers’ permits run around $10 to $15.

6. Commercial Sign Permit

For small businesses, signage could be the cornerstone of your marketing strategy. After all, it’s an inexpensive but highly effective way to entice new customers to your business. Before you install a sign, you’ll need a permit from the city, which will have restrictions on the size, style, and lighting intensity. Elon Musk learned this the hard way when he installed a giant flashing “X” sign atop his San Francisco headquarters after acquiring Twitter. When complaints flooded in from nearby residents, the city discovered he didn’t have a permit, and he was forced to take it down after a few days (a permit might be required for dismantling, too).

How to Get a Commercial Sign Permit

Outdoor signs often need to be approved by the local government. In San Francisco, for instance, you can research the sign rules on the city’s website and then visit the permit center in person to complete the appropriate application. Business owners may need to submit construction drawings drafted by a licensed architect, engineer, or contractor. Check with your city about awning permits as well.

How Much Does a Commercial Sign Permit Cost?

A sign permit can cost between $20 and $50.

7. Sales Tax License

Some states call this a “seller’s permit,” its function is to allow the state to identify your small business as a sales tax collector. It’s needed to sell almost all products and services. Most businesses, especially in the food and beverage industry, need to obtain a seller's permit as well as a resale certificate (more on that next).

How to Get a Seller's Permit 

You can register online for a seller's permit by visiting your state’s Department of Revenue. Online registration, phone assistance, and in-person assistance are often available.

How Much Does a Seller's Permit Cost?

Applying for the sales tax license is free, but you may have to leave a security deposit if you have unpaid taxes. The amount of this deposit will be determined when you apply.

8. Resale Permit

No small business wants to pay unnecessary taxes. If you buy goods from other suppliers solely for resale purposes, you’ll need a resale permit so that you only pay sales tax once on these products. In other words, it enables you to make specific non-taxable purchases (wholesale apples, for instance) if they are used in products for resale (apple pies). Without a resale permit, you’ll be paying tax twice: first, when you buy the apples from a supplier, and then again when you sell the pies to a customer. Instead, goods purchased exclusively for resale will be subject to sales tax only when they are finally sold to a customer for personal use.

How to Get a Resale Permit

Each state has its own rules about resale permits, and not all of them require one. To get started, visit the Department of Taxation and Finance for the state in which you conduct business. Typically, the forms and documents are available online. Keep in mind that if you conduct business in other states, you’ll need to apply for “nexus” permits in each state where your goods or services are sold. You’ll be asked to provide your bank account numbers and projected monthly sales.

How Much Does a Resale Permit Cost?

This permit can cost from $0 to $50.

9. Liquor License

If you plan on selling alcoholic beverages in the U.S., you must apply for a liquor license. Some states may require a liquor license and a beer and wine license. There are two major types: On-license is for those who intend to sell alcohol consumed on premises, like a bar or restaurant. Off-licenses are for businesses that sell alcohol that will be consumed off-premises, like a bottle shop or grocery store. The application process can sometimes take months, so apply for a liquor license as soon as possible.

How to Get a Liquor License

Liquor licenses: Start your journey here to find out which department you’ll be dealing with in your state and what rules and laws your state requires.

How Much Does a Liquor License Cost?

The price varies by state. A liquor license costs as little as $100 in Idaho and as much as $1,400 in California.

10. Health Permits

Many businesses other than restaurants require health permits, including children’s camps, hair and nail salons, yoga studios, laundromats, hotels, tattoo parlors, and more. This permit, also known as an environmental health permit, ensures that the business premises meet all hygiene and health safety regulations. You must demonstrate your property has proper sanitation, ventilation, and lighting.

How to Get a Health Permit

To obtain this permit, you may have to provide a floor plan that indicates room dimensions, the number of occupants, and emergency exits. You should also have a list of all materials used for your small business, including cleaning products and any special equipment.

How Much Does It Cost to Get a Health Permit?

The cost of obtaining a health permit varies by certification area, so it’s best to check with your local health department for further information. In California, for instance, it can range from $700 to $2000.

Timeline For Opening a Small Business

12 Months Out

First things first, you’ll want to make sure your small business actually exists in the real world (and not just in your wildest dreams). This means filing and registering your business with the Federal Government, the state, and your local municipality.

DBA (Doing Business As)

The name of your business is the bedrock of your brand and must be established before you can even think about things like marketing, signage, and a website. Top priority? Check your state's official database to find out if the name you want is available. Once your DBA is established, you can open a business bank account, undertake transactions for your company, and search for a killer domain name for your website.

In some states, you’ll need to publish a statement in a local newspaper near your place of business within a month of filing and let the ad run for several weeks. You may also be required to file an affidavit after the last publish date. Check with your local Registrar-Recorder/County Clerk’s Office for specific requirements.  

EIN

A tax ID number (EIN) is another crucial piece to have in place early on. Without it, your small business simply won’t get off the ground. You’ll need it to file federal tax returns, to open a business bank account, or to apply for a credit card. When it comes to invoicing, many companies won’t even pay you without an EIN. It’ll also come in handy when you apply for your General Business License (up next), as many states require this number on applications.

You can apply online or using IRS Form SS-4 (“Application for Employer Identification Number”).  You’ll need to provide basic information about your business, including your industry type and projected number of employees. 

General Business License

Since you need this to conduct business legally, it’s best to get the ball rolling STAT, as soon as you have your business plan in hand. You’ll be asked for basic info, including your business name, EIN, business type (for instance, LLC), and anticipated revenues and expenses. Gathering your key details could take a while, so we recommend checking these requirements well in advance.

9 Months Out

Now that you’ve established your business in the eyes of the government, it’s time to tackle the most notorious licenses and permits: Liquor, Food, and Health. While a lucky few sail through these easily, we won’t mince words: these three licenses have a reputation for delays. You’ll want a lot of lead time before your launch.

Liquor License

Alcohol is one of the most heavily regulated products in the U.S., so it’s no surprise that getting a liquor license can be super complicated and expensive. The entire process can take anywhere from 40 days to six months or more, so jumping on this early is essential. Each jurisdiction differs in how liquor licenses are approved: some leave it to state agencies, called Alcoholic Beverage Control (ABC), to handle, while other counties and cities have their own requirements. You’ll likely have a preliminary application followed by an in-person appointment with an official who screens applicants. Expect to reveal personal financial information and undergo credit and background checks.

Food Service Licenses

There’s no one clearinghouse for food service licenses, which means you’ll be doing some digging to find the requirements in your area. Since some permits are city- and county-based while others are administered by the state, processing times can vary widely.

At the Federal level, food products are heavily regulated by the FDA or the USDA, which require a variety of registrations depending on the nature of your business. For instance, food facilities must register with the FDA under the Bioterrorism Act of 2002.

Then, there are the state and local health departments that require permits for differing food-related businesses, from manufacturing and processing to food trucks and even vending machines. Check with your State Department of Agriculture and State Department of Health for more information.

Health Permits

Many businesses beyond food-related ventures require health permits to ensure the safety of customers and employees. When you apply for a health permit, which can often be done online with your local health department, you’ll need an inspection to ensure your space and practices will fit all applicable codes and ordinances. That’s where problems and delays can potentially arise. You may be asked to revise your layout or make changes to your building. You will receive your health permit once your business is deemed safe to operate. 

6 Months Out

Resale Permit

If you’re buying goods from a wholesaler or supplier to resell them, you’ll need this permit to avoid being double-taxed. While you may not be stocking up your inventory just yet, it’s great to get this off your plate so you can focus on the permits to come. You’ll need basic personal information for every partner or owner in your business. This ranges from the easy stuff (like your EIN) to projected monthly sales, which you can pull from your business plan.

Sales Tax License

The resale permit and the sales tax license go hand-in-hand. Every state with a sales tax requires businesses to register for a sales tax permit before collecting or paying taxes. Most states encourage businesses to register online, and you’ll be asked to provide similar information to the resale permit. You’re required to hold a seller permit in states where you have “nexus,” which is a fancy way of saying that you have a connection with a state that’s significant enough to trigger a sales tax obligation. Registration for your sales tax license, or “seller’s permit,” can take up to a month.

3 Months Out

Certificate of Occupancy

Your small business can’t fling open its doors to the public unless the “C.O.” is in place. A building inspector will review your city permits and conduct an interior and exterior inspection of your property to ensure you comply with all building codes. You’ll typically have 60 days to make changes to avoid additional fees if any violations are noticed.

Commercial Sign Permit

It’s up to you how far in advance you want your sign on your building. Installing a sign early can create excitement and curiosity in your community about your new business. The average time for a sign permit is ten to 30 days, but it can be shorter or longer depending on what you need to do. Heads up: many cities require plans from a licensed architect or consultant, so you’ll need to have your brand identity locked in and a designer on board well before you apply. Remember that historic districts may take longer than other areas because of stricter regulations.

Food Handlers Permit

Once the tricky licenses come through — liquor, food, and health — it’s also important to ensure that all staff who serve food and beverages are certified for safe handling. If you’re a bar owner, your employees will need to spot (and intervene) when a customer is approaching their limit. Generally, new employees have 30 days from the date of hire to get a card, and the process takes only a few hours.

Navigating business permits and licenses is no easy feat, and in the end, you may feel like you’ve earned a Ph.D. in government administration. However, it’s a challenge that all business owners must face. Once you’ve mastered this, you can focus on the good stuff: mastering the economies of scale, driving down costs, and growing your incredible new business.

Why Toast Retail is Perfect for Small Business

In today's competitive retail landscape, selecting the right technology is essential for both new ventures and established businesses aiming for success. Solutions like Toast retail not only streamline operations, making them more efficient, but also provide invaluable insights to optimize the financial health of the business. 

By harnessing the power of point of sale technology, retailers can gain a competitive edge, improve customer satisfaction, and drive sustainable growth. Choosing the right technology sets the foundation for long-term success, empowering businesses to adapt to evolving market demands and thrive in an increasingly digital world.

The tech that redefined restaurants is now here to transform retail. Supercharge your store with the POS built for high volumes and complexity, offering everything you need to run your business on one platform. Toast's retail offering is a game-changer for businesses like convenience stores, liquor stores, and grocery stores, revolutionizing how they operate and interact with customers. Here's why Toast is the perfect fit for these retail environments.

1. Helps Modernize How You Sell

Toast's intuitive, cloud-based system simplifies daily operations. Its user-friendly interface makes staff training a breeze, ensuring seamless adoption across your team. Whether it's processing payments in-store or integrating with online sales channels, Toast ensures a smooth and consistent experience for your customers regardless of how they shop.

• Intuitive Cloud-Based System: Our intuitive, cloud-based system is easy to learn and easy to use. Say goodbye to complicated interfaces and hello to streamlined processes. Toast is designed to simplify your day-to-day operations, from staff training to consolidated operations, ensuring maximum efficiency and productivity.

• Seamless Payment Processing: Toast’s seamless payment processing easily integrates with online payments for smoother sales every time, no matter how your customers are shopping. This integration ensures a hassle-free experience for both customers and staff, leading to increased satisfaction and faster transactions.

• Flexible Order and Checkout Options: Offer flexible and efficient order and checkout options with reliable hardware including handhelds, kiosks, and guest-facing terminals. Adapt to the diverse needs of your customers and reduce wait times at checkout with Toast's versatile hardware solutions, enhancing the overall shopping experience.

2. Streamline Retail Management

Efficiency is key in retail, and Toast delivers with automated, mobile-first inventory management. Say goodbye to manual inventory tracking and hello to SmartScan, a feature that enables quick product scanning and shelf placement. Managing thousands of SKUs becomes effortless with Toast's intuitive product database and bulk update capabilities.

• Automated, Mobile-First Inventory: Experience the freedom of automated, mobile-first inventory management with Toast. Create and print barcodes in bulk, and take new products from scan to shelf in seconds with our SmartScan feature. Say goodbye to tedious manual inventory tasks and hello to streamlined operations.

• Efficient SKU Management: Easily manage thousands of SKUs with our intuitive product database and bulk updates feature. Modify, reprice, and import multiple products at once, saving valuable time and resources. With Toast, keeping track of your inventory has never been easier.

• Retail-Enhanced Dashboards: Stay on top of your business with retail-specific dashboards and cost-tracking reports. Monitor trends, maximize margins, and ensure your top-selling products are always stocked, empowering you to make data-driven decisions that drive profitability.

3. Tailor Your Customer Experience

Toast empowers you to tailor the customer experience to fit your unique retail concept. Whether you're considering adding food service or expanding your offerings, Toast's flexible platform accommodates creative expansion.

• Creative Expansion Opportunities: Thinking of adding food service to your retail concept? Including Kitchen Display Systems and Order Ready Boards, our flexible platform allows for creative expansion. Explore new revenue streams and enhance the overall customer experience with Toast's versatile features.

• Online Ordering and Delivery Integrations: Give your guests the option to order from home with Toast’s Online Ordering and our third-party delivery integrations. Meet your customers where they are and provide convenience that keeps them coming back, increasing customer loyalty and satisfaction.

• Loyalty Rewards and Personalized Offers: Be your neighborhood's favorite shop (and incentivize repeat visits) with loyalty rewards and personalized offers. Transform one-time shoppers into loyal patrons by engaging with your community and offering enticing rewards, making your store the go-to destination for your customers.

In conclusion, Toast's retail solution is more than just a point of sale system; it's a comprehensive toolkit designed to elevate your retail store to new heights. From modernizing sales processes to streamlining management and enhancing the customer experience, Toast empowers retail businesses to thrive in today's competitive market.

Why Toast Retail is Perfect for Small Business Stores

In today's competitive retail landscape, selecting the right technology is essential for both new ventures and established businesses aiming for success. Solutions like Toast retail not only streamline operations, making them more efficient, but also provide invaluable insights to optimize the financial health of the business. 

By harnessing the power of point of sale technology, retailers can gain a competitive edge, improve customer satisfaction, and drive sustainable growth. Choosing the right technology sets the foundation for long-term success, empowering businesses to adapt to evolving market demands and thrive in an increasingly digital world.

The tech that redefined restaurants is now here to transform retail. Supercharge your store with the POS built for high volumes and complexity, offering everything you need to run your business on one platform. Toast's retail offering is a game-changer for businesses like convenience stores, liquor stores, and retail stores, revolutionizing how they operate and interact with customers. Here's why Toast is the perfect fit for these retail environments.

1. Helps Modernize How You Sell

Toast's intuitive, cloud-based system simplifies daily operations. Its user-friendly interface makes staff training a breeze, ensuring seamless adoption across your team. Whether it's processing payments in-store or integrating with online sales channels, Toast ensures a smooth and consistent experience for your customers regardless of how they shop.

• Intuitive Cloud-Based System: Our intuitive, cloud-based system is easy to learn and easy to use. Say goodbye to complicated interfaces and hello to streamlined processes. Toast is designed to simplify your day-to-day operations, from staff training to consolidated operations, ensuring maximum efficiency and productivity.

• Seamless Payment Processing: Toast’s seamless payment processing easily integrates with online payments for smoother sales every time, no matter how your customers are shopping. This integration ensures a hassle-free experience for both customers and staff, leading to increased satisfaction and faster transactions.

• Flexible Order and Checkout Options: Offer flexible and efficient order and checkout options with reliable hardware including handhelds, kiosks, and guest-facing terminals. Adapt to the diverse needs of your customers and reduce wait times at checkout with Toast's versatile hardware solutions, enhancing the overall shopping experience.

2. Streamline Retail Management

Efficiency is key in retail, and Toast delivers with automated, mobile-first inventory management. Say goodbye to manual inventory tracking and hello to SmartScan, a feature that enables quick product scanning and shelf placement. Managing thousands of SKUs becomes effortless with Toast's intuitive product database and bulk update capabilities.

• Automated, Mobile-First Inventory: Experience the freedom of automated, mobile-first inventory management with Toast. Create and print barcodes in bulk, and take new products from scan to shelf in seconds with our SmartScan feature. Say goodbye to tedious manual inventory tasks and hello to streamlined operations.

• Efficient SKU Management: Easily manage thousands of SKUs with our intuitive product database and bulk updates feature. Modify, reprice, and import multiple products at once, saving valuable time and resources. With Toast, keeping track of your inventory has never been easier.

• Retail-Enhanced Dashboards: Stay on top of your business with retail-specific dashboards and cost-tracking reports. Monitor trends, maximize margins, and ensure your top-selling products are always stocked, empowering you to make data-driven decisions that drive profitability.

3. Tailor Your Customer Experience

Toast empowers you to tailor the customer experience to fit your unique retail concept. Whether you're considering adding food service or expanding your offerings, Toast's flexible platform accommodates creative expansion.

• Creative Expansion Opportunities: Thinking of adding food service to your retail concept? Including Kitchen Display Systems and Order Ready Boards, our flexible platform allows for creative expansion. Explore new revenue streams and enhance the overall customer experience with Toast's versatile features.

• Online Ordering and Delivery Integrations: Give your guests the option to order from home with Toast’s Online Ordering and our third-party delivery integrations. Meet your customers where they are and provide convenience that keeps them coming back, increasing customer loyalty and satisfaction.

• Loyalty Rewards and Personalized Offers: Be your neighborhood's favorite shop (and incentivize repeat visits) with loyalty rewards and personalized offers. Transform one-time shoppers into loyal patrons by engaging with your community and offering enticing rewards, making your store the go-to destination for your customers.

In conclusion, Toast's retail solution is more than just a point of sale system; it's a comprehensive toolkit designed to elevate your retail store to new heights. From modernizing sales processes to streamlining management and enhancing the customer experience, Toast empowers retail businesses to thrive in today's competitive market.

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